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Monday, 09 February 15
AUSTRALIAN COAL PRODUCERS BEST POSITIONED IN OVERSUPPLIED MARKET; US MINES MOST AT RISK - WOOD MACKENZIE
 In a 2015 global coal outlook report, Wood Mackenzie says that Australia and Indonesian coal suppliers will see some upside in the difficult months ahead as they continue to capture market share of coal exports from higher cost producers. Further modest productivity gains, the rapid fall in oil prices and currency devaluation in Australia and Russia will help lower costs. Therefore, Australian mines stands in a relatively strong position compared with higher cost suppliers - particularly those in the US - which are at much greater risk of closures this year. Even with increased closures and reduced US supply, Wood Mackenzie says they do not foresee sufficient volume exiting to balance the market and support price recovery. Lower-than-anticipated demand, especially from China combined with persistent production will be key factors that will sustain the weak market environment.
Australian producers best positioned in 2015
Mr Rory Simington, Principal Asia Pacific Coal Analyst says, “Australia is a standout competitor in both the metallurgical (met) and thermal coal trade, but particularly the former. Comparing 2014 from 2013, while global met coal import demand reduced by about 8 Mt, Australian exports rose by around 14 million tonnes (Mt), growing seaborne market share from 58% to 64%. The scalability of Australian mines and their high coal quality has enabled the displacement of major competitors in US, Canada and Indonesia. This trend is likely to continue thanks to a continued strong operating performance plus currency depreciation. On the other hand, US suppliers, many of which exhibit high costs, will not see the cost relief that currency devaluation brings to Australia.”
Furthermore, increased competition will come from higher Mozambique exports this year as Vale’s Nacala transport corridor ramps up indicating another year of aggressive pricing as producers fight to secure sales. In thermal coal, Australian exports were also strong, leaping 20Mt despite seaborne demand remaining essentially flat last year.
Lower costs discourage large-scale shutdowns
Despite a traumatic 2014 for the coal industry, mine shutdowns were relatively muted. Mr Simington explains, ”In fact metallurgical supply reductions were more than offset by the reduction in Chinese import demand, resulting in increased overcapacity. Although overall closures will accelerate this year, they will unlikely redress the imbalance.” Costly take or pay obligations in the event of closure, makes it more expensive for mines to shutdown than operate at a loss. As such, they remain in production and hamper the return to tighter market conditions. The recent low oil price and exchange rate has driven cost relief for Australia, Indonesia and Russia, which will further reduce the likelihood of wholesale supply cuts as well as delay any price recovery.
China uncertainties depress demand in oversupplied market
China’s economic rebalancing will continue to affect power demand growth and therefore thermal coal requirements. Of critical importance to the seaborne trade will be the effects of Government policies designed to protect the environment as well as domestic coal suppliers. Mr Robin Griffin, Research Director for Global Metallurgical Coal, says, “Current industry focus is on the new trace element restrictions for imported coal. We see most seaborne supply meeting the new guidelines but import levels are affected due to the uncertainty of the accuracy of coal quality tests and delays it may cause to the delivery process. Another big uncertainty to watch is the lengths to which the Chinese Government will go to protect its domestic industry.” Wood Mackenzie says stricter limits on imported coal quality is possible and the Government could make an aggressive move to waive the 17% value added tax (VAT) charged on coal sales which could considerably enhance the competitiveness of Chinese coal and enable some of the best quality and lowest cost Chinese coking coal to compete into Japan, South Korea or Taiwan. Should this occur, worsened oversupply conditions could occur in 2015.
Mr Griffin says “As China makes up 22% of seaborne trade and is expected see continued domestic oversupply, the country will be a major cause of depressed global import demand this year. Market fundamentals outside of China also remain uninspiring, for both metallurgical and thermal coal. Under such circumstances a material price recovery is unlikely this year”.
M&A activities to pick up in 2015
“Mine asset valuations have fallen considerably over the last three years due to the weakening market. Whilst low prices endure more companies will look to shed assets, perhaps to decrease debt or to allow a greater focus on their highest value operations. The negative price environment will persist through 2015 but not forever. Given our expectation of long term strength in coal demand fundamentals, the present market conditions offer a window of opportunity for both suppliers and buyers to consolidate their positions in the industry. We expect M&A to start picking up this year particularly for companies who want to gain a foothold in the industry for the long term.”
About Wood Mackenzie
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions
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Tuesday, 17 February 15
FOB SUB-BIT INDONESIA COAL SWAP UP 8% MONTH OVER MONTH
COALspot.com: Indonesian coal swaps for delivery Q2' 2015 rose week over week and month on month.
The Q2 swap up US$ 3.58 (+8.00%) month o ...
Tuesday, 17 February 15
Q2' FOB RICHARDS BAY COAL SWAP CLOSED AT $63.45; $ 1.85 HIGHER COMPARED TO Q4 CLOSING
COALspot.com: API 4 FOB Richards Bay Coal swap for delivery Q2' 2015 surge month over month, week on week and day on day.
The Q2 swap has ...
Monday, 16 February 15
COAL MINING SLUMP A BLESSING IN DISGUISE - THE JAKARTA POST
The growth of the coal-mining industry, which has diminished in the last two years, is expected to slump even further this year following weakening ...
Monday, 16 February 15
FOB NEWCASTLE COAL SWAPS SURGE WEEK ON WEEK
COALspot.com: API 5 FOB Newcastle Coal swap for Q2’ 2015 delivery rose US$ 1.31 per MT (+2.59%) week over week and US$ 4.35 (+9.13%) month on ...
Monday, 16 February 15
Q2' 15 - CFR SOUTH CHINA COAL SWAP ROSE 5.22% M-O-M
COALspot.com: API 8 CFR South China Coal swap for Q2’ 2015 delivery rose US$ 2.88 (+5.22%) per MT month over month and US$ 1.08 (+1.90% ...
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- Leighton Contractors Pty Ltd - Australia
- Eastern Energy - Thailand
- Kideco Jaya Agung - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Madhucon Powers Ltd - India
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Petrochimia International Co. Ltd.- Taiwan
- Gujarat Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Planning Commission, India
- Port Waratah Coal Services - Australia
- Rashtriya Ispat Nigam Limited - India
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- PNOC Exploration Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Bulk Trading Sa - Switzerland
- McConnell Dowell - Australia
- Barasentosa Lestari - Indonesia
- Timah Investasi Mineral - Indoneisa
- Therma Luzon, Inc, Philippines
- Baramulti Group, Indonesia
- Indonesian Coal Mining Association
- Australian Coal Association
- Sinarmas Energy and Mining - Indonesia
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Binh Thuan Hamico - Vietnam
- Deloitte Consulting - India
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Miang Besar Coal Terminal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Mercuria Energy - Indonesia
- SMG Consultants - Indonesia
- Manunggal Multi Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Finance - Indonesia
- Borneo Indobara - Indonesia
- Renaissance Capital - South Africa
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Australian Commodity Traders Exchange
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Central Electricity Authority - India
- TNB Fuel Sdn Bhd - Malaysia
- Kalimantan Lumbung Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Mjunction Services Limited - India
- India Bulls Power Limited - India
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Xindia Steels Limited - India
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
- Bhushan Steel Limited - India
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Energy Development Corp, Philippines
- Chettinad Cement Corporation Ltd - India
- Orica Mining Services - Indonesia
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Ministry of Mines - Canada
- Bayan Resources Tbk. - Indonesia
- Vedanta Resources Plc - India
- Pendopo Energi Batubara - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- Simpson Spence & Young - Indonesia
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Jaiprakash Power Ventures ltd
- Wood Mackenzie - Singapore
- Larsen & Toubro Limited - India
- Medco Energi Mining Internasional
- Bahari Cakrawala Sebuku - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- PowerSource Philippines DevCo
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Parliament of New Zealand
- Siam City Cement - Thailand
- Electricity Authority, New Zealand
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- MS Steel International - UAE
- Bhatia International Limited - India
- Kumho Petrochemical, South Korea
- Kartika Selabumi Mining - Indonesia
- Indian Energy Exchange, India
- Meenaskhi Energy Private Limited - India
- Heidelberg Cement - Germany
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Attock Cement Pakistan Limited
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Minerals Council of Australia
- Indo Tambangraya Megah - Indonesia
- CIMB Investment Bank - Malaysia
- Vizag Seaport Private Limited - India
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Sojitz Corporation - Japan
- Makarim & Taira - Indonesia
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- OPG Power Generation Pvt Ltd - India
- Standard Chartered Bank - UAE
- Ministry of Transport, Egypt
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- LBH Netherlands Bv - Netherlands
- Sindya Power Generating Company Private Ltd
- Aboitiz Power Corporation - Philippines
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- ICICI Bank Limited - India
- San Jose City I Power Corp, Philippines
- Maheswari Brothers Coal Limited - India
- White Energy Company Limited
- Georgia Ports Authority, United States
- SMC Global Power, Philippines
- Billiton Holdings Pty Ltd - Australia
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Energy Link Ltd, New Zealand
- Coalindo Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- Bhoruka Overseas - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The Treasury - Australian Government
- Kepco SPC Power Corporation, Philippines
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- GVK Power & Infra Limited - India
- Dalmia Cement Bharat India
- New Zealand Coal & Carbon
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Power Finance Corporation Ltd., India
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- GMR Energy Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Eastern Coal Council - USA
- South Luzon Thermal Energy Corporation
- Pipit Mutiara Jaya. PT, Indonesia
- Formosa Plastics Group - Taiwan
- Kobexindo Tractors - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coal and Oil Company - UAE
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- Malabar Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- Savvy Resources Ltd - HongKong
- Global Coal Blending Company Limited - Australia
- PTC India Limited - India
- Global Green Power PLC Corporation, Philippines
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Aditya Birla Group - India
- Sical Logistics Limited - India
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